Section 4: Strategic Planning
The Strategy Change Cycle
Bryson, J.M. (2004). Chapter Two: “The Strategy Change Cycle: An Effective Strategic Planning Approach for Public and Nonprofit Organizations.” Strategic Planning for Public and Nonprofit Organizations. Jossey-Bass Publishers, San Francisco: CA.
Author: Damon-Cronmiller, Christopher; Editor: Gobbo, Andre Francis
In Chapter 2 of Strategic Planning for Public and Nonprofit Organizations (entitled “The Change Cycle: An Effective Strategic Planning Approach for Public and Nonprofit Organizations”) author JM Bryson discusses his “Strategy Change Cycle” in detail. He also makes recommendations on when people working in public service organizations should make use of this strategy.
Along with the Theory of Change, the Strategic Planning Model has been proven effective in both academic and practical settings. This model is designed to have the same broad applications for public service organizations, whether they be through the government or as an independent non-profit.
According to Bryson in Chapter 2, p. 21, the Strategy Change Cycle can be broken down into the following activities: setting the organization’s direction; formulating broad policies; making internal and external assessments; paying attention to the needs of key stakeholders; identifying key issues; developing strategies to deal with each issue; planning review and adoption procedures; implementing planning ; making fundamental decisions; taking action; and continually monitoring and assessing the results.
Ten-Step Strategic Planning Process
The Strategy Change cycle also follows a much more structured series of 10 steps which Bryson explains in more detail. These steps are not necessarily they are the most “useful” in a professional setting, but they are the steps that are most popular amongst those who are familiar with the Strategy Change Cycle.
Initiating and Agreeing on a Strategic Planning Process
This step primarily involves figuring out who is directly involved in an organization’s decision-making process, and who should be most involved in carrying out the overall strategic planning effort.
_Identifying Organizational Mandates _
The second step involves figuring out the “musts” that an organization confronts, which can prove useful for key decision makers in ensuring that they know the expectations of themselves and their immediate colleagues going forward.
Clarifying Organizational Mission(s) and Values
Directly linked to the previous step, organizations in the 3rd Step should figure out what social and/or political needs it seeks to fulfill, and how they should serve “as a means to an end, not as an end in themselves (27).” Stakeholder analysis is invariably a component of this step, and therefore has some overlap with Step 1. In fact, Bryson recommends that parts of this 3rd Step should be undertaken before anything else in the strategic planning process.
_Assessing the Organization’s External and Internal Environments _
In the context of strategic planning, an organization's external and internal environments refer to opportunities and threats that exist both inside and outside of the organization that could directly impact its future.
Identifying the Strategic Issues Facing the Organization
According to Bryson, “Strategic issues are fundamental policy questions or critical challenges that affect an organization’s mandates, mission, and values (30).”
Formulating Strategies and Plans to Manage the Issues
Broadly defined, a strategy outlines “what an organization is, what it does, and why it does it (31)." A strategy also explains how an organization should face its “issues” outlined in the previous step.
Reviewing and Adopting the Strategies and Plan(s)
This 7th step involves confirming whether everyone in an organization agrees on the same strategic plan and has no reservations about it.
_Establishing an Effective Organizational Vision _
Bryson argues that having a vision is useful to an organization in that it allows “members to know what is expected of them, without constant managerial oversight (35).”
Developing an Effective Implementation Process
In what is arguably the most important component of the Strategic Planning Cycle, an organization figures out how to make its plan a reality from the ground up. Obviously this step is easier said than done.
_Reassessing Strategies and the Strategic Planning Process _
This final step is meant to be an ongoing process, or at the very least “once the implementation process has been under way for some time (37).”
Tailoring the Process to Specific Circumstances; Roles for Planners, Decision Makers, Implementers, and Citizens
In the last section of the second chapter, Bryson stresses that the Strategic Change Cycle is not meant to be taken literally or as a “one-size-fits all” public administration theory. In other words, an organization facing administrative challenges may have to start at Step 2 or even Step 9 in order to effectively complete its strategic planning process.
Bryson also acknowledges that implementation of a strategic plan often occurs during (or even before) the complete formation of said plan due to time constraints and the need to make decisions quickly.
On a final note, Bryson argues that the importance of citizen participation in an organization's strategic planning process is by and large dependent on how program-focused the organization is. If a strategic planning initiative focuses solely on the internal affairs of a public organization, then executive staff and/or board members would naturally have the most stake in it. On the other hand, program-focused strategic planning necessitates more citizen participation due to the larger number of stakeholders involved.
The Price of Success: Minnesota Public Radio
Phills, J. A., & Chang, V. (2005). The Price of Commercial Success Minnesota Public Radio: social purpose capitalism. Stanford Social Innovation Review, 3(1), 65-72.
Author: Whiting, Cal McCulley; Editor: McCully, James I
Overview of the Case Study:
This case study analyzes Minnesota Public Radio (MPR) and offers three main questions on the relationships between non-profit organizations and for-profit businesses.
These main questions are:
1. What factors contribute to a non-profit’s ability to build for-profit ventures?
2. How can a non-profit best utilize it's earned income to advance its social mission?
3. What are the challenges and dilemmas of social entrepreneurship?
MPR commercial endeavors began on “A Prairie Home Companion” which sold t-shirts and merchandise of concepts from the show. These fundraising efforts were highly successful and MPR soon faced a steady flow of profits. Consequently, MPR created the Rivertown Trading Company to manage the sale of these items. By 1998, Rivertown generated sales close to $200 million and on average contributed $4 million to support MPR. President Bill Kling termed this type of business as “social purpose capitalism.” Social purpose capitalism was defined as “the application of the traditional principles of capitalism … to a nonprofit organization [to] benefit the public sector.” MPR and its executives soon faced criticism and skepticism from the public, as well as politicians and state judiciary for its use of for-profit funds for the benefit of a non-profit. Jon Pratt, executive director of the Minnesota Council of Nonprofits, described this dilemma: “This is the plight of the nonprofit sector today. It is both told to be more businesslike, and then attacked for being too businesslike.”
MPR, Greenspring, and the Controversy over Social Purpose Capitalism:
MPR underwent a reorganization in 1987 that placed the Rivertown Trading Company under the umbrella of a for-profit company called Greenspring. Although MPR and Greenspring were legally separate, Kling served as President of both organizations and they functioned largely in unison. The new company greatly helped MPR raise funds and improve its services. By 2004, MPR had an operating budget of $47 million, had 38 stations covering Minnesota, parts of Wisconsin, the Dakotas, Michigan, Iowa, Idaho, and Canada. It had approximately 650,000 listeners per week and served a regional population of more than 5 million people. MPR staff received over 800 journalism awards and Kling was awarded the 1981 Edward R. Murrow Award from the Corporation for Public Broadcasting. MPR’s successes were due in large part to its ability to raise for-profit funds which called into question its non-profit status.
A major point of contention was how much Kling and others were making as dual-executives in MPR and Greenspring. As a non-profit, executive salaries were a part of the public record. In 1995, Kling’s MPR salary was $67,000. In 1996, Minnesota passed a law requiring non-profit executives to disclose their income from related for-profits; Kling made $291,752 at Greenspring for a total income of $358,752. This disparity in income raised a potential conflict of interest and worried the public and lawmakers.
This case and social purpose capitalism highlight the difficulties that non-profits face in raising revenue to expand their service capacity. Non-profits are increasingly tasked with becoming more efficient but are highly scrutinized for using for-profit techniques or business endeavors to accomplish their mission. It cannot be denied that most of MPR’s success was due to its ability to raise profits to increase its capacity. The authors summarized this controversy: “Both the government and private funders have encouraged – and even pressured – nonprofits like MPR to become more self-reliant by pursuing earned income. But these stakeholders, as well as the general public, are ambivalent about such commercial activity when it becomes so successful that it outstrips the core social purpose activities.”
Leading IslandWood: Strategic Planning in the Nonprofit Sector
David Cook and Lauren Guzauskas (2012). Leading IslandWood. E-PARCC Case Study in Collaborative Governance.
Author: Steele, Samantha E; Editor: Kim, Chung Myung
Paul and Debbi Brainerd had been house hunting in Bainbridge Island in 1997 when they first visited an 1100 acre site that was scheduled for residential and commercial development. After touring the site and finding it full of ecological wonders, Debbi wanted to start an environmental education center for inner-city youth. The founders purchased a 255 acre parcel and donated the land to the non-profit organization they created, originally named Puget Sound Environmental Learning Center (PSELC). Despite the well-meaning vision that started what came to be known as IslandWood and all of the contributors that bought into that vision, the organization would hit a few speed bumps resulting from the poor management of the diversity of stakeholders.
Troubles on the Island
IslandWood was Debbi’s brainchild and she had a clear vision, and a strategic plan to go along with it. The bones of which were to: 1) acquire land, donors, staff; 2) open operations and be fiscally sustainable. It was the intricacies of the plan that complicated things, the devil is in the details as they say. Everyone involved believed in her vision for IslandWood, everyone bought into the “why” but not the “how,” not her strategy. Part of the reason was the diversity of staff brought into the organization. PSELC had found their site, found donors, recruited numerous well-known board members and staff and even established a partnership with the University of Washington. However, each person had their own passion and personal expertise that was often created conflicts with other's interests. The disparity between staff eventually led their first executive director to leave the organization before the site had even finished construction. Not only that, as each individual worked hard to reach their goals, they started to feel that vision and mission was changing, so they began to burnt out.
After hiring consultants to investigate the decrease in staff moral they came to find that there were three distinct, competing cultures at the organization. These three distinct groups were, academics and educators, non-for-profit expertise, and lastly the corporate culture. In addition to the high turnover rate, they were also facing financial challenges. As a result, IslandWood had decided to cut community programs for the Bainbridge Island residents, this would severely strain the relationship they had with the local community. Within four and a half years the organization was looking for their fourth executive director, Ben Klasky was eventually hired for that role.
A New Start
Ben immediately scheduled individual meetings with each staff member, including all part-time employees. He used each interaction to help shape the critical trends he decided to address during the strategic planning process. Klasky worked to maintain a strong relationship with Debbie in order to provide a strong unified front to the organization. In what turned out to be an advantage, the media misrepresented the financial troubles of IslandWood claiming they were losing millions of dollars a year. Ben reached out to all of the donors in order to discuss the potentially damaging article. This occurrence actually helped transition the power and organizational authority over to Ben. Debbi decided to step down from full-time work, with the support of the board of trustees, and Ben inherited the roles of the day-to-day operations. Ben took charge on building a strategic plan that involved better utilizing IslandWood all year, not just Monday through Thursday during school session and developing a better relationship with the local community. The article leaves us with Ben’s realization that it was now time to reach out to the board of directors and staff leaders to aid him in the construction of this plan.
Strategic Management in the Public Sector
Boyne, G.A., and Walker, R.M. (2010). “Strategic Management and Public Service Performance: The Way Ahead.” Public Administration Review, December-Special Issue, S185-192.
Author: Tansits, Colin E; Editor: Washington, Layvon Q
Boyne and Walker provides a review of Strategic Management and Public Service performance, which discusses strategic managment practices for many public service organizations. The authors begin the article by addressing the notion that public organizations are expected to achieve high standards on a variety of dimensions of performance. These expectations are not going anywhere, according to the authors. The crux of the article, however, focuses on the strategy which organizations adopt to pursue their objectives.
Why Does Strategy Matter?
Unlike private sector organizations focused on beating rivals, public organizations’ strategy is set to bettering their performances and services. The powers of public organizations are limited by political, legal, and regulatory constraints. However, there are different strategies available in the public sector: “product and process innovations (i.e. provision of new services), coverage of new client groups, and delivery of services ‘in house’ or in collaboration with others.”
Miles and Snow’s typology of strategies sets out three different ways for an organization to approach the political, physical, and socioeconomic environment: 1) a prospector organization actively seeks out new opportunities for providing existing services and innovations in the types of service that are provided, 2) a defender organization focuses on procedures rather than products and tries to maintain a stable portfolio of services that are delivered reliably and at low cost, and 3) a reactor organization has no real strategy of its own, but instead take its cues from powerful actors in its environment, such as higher levels of government or regulatory agencies. The authors summarrized the aformentioned approaches by stating that “the three main options that are open to a public organization that is seeking to meet the expectations of its many stakeholders: search for something new, stick with the existing pattern of services, or await instructions.”
Strategy in public organizations is based on the assumption that an unambiguous strategy is a necessary prerequisite for good performance. There are 3 key suppositions to be made with this idea: 1) performance is not completely determined by the technical and institutional environments and by internal organizational characteristics such as structures and processes, 2) a strategy that is linked to identifiable goals for performance improvement may help generate support from managers and frontline staff, and 3) strategic management actually varies across public organizations.
Strategy and Performance: What do we know?
Despite limited data and only few articles to base its conclusion on, the article explains that the numbers illustrate that “strategy content is clearly an important variable that influences performance.” The article stated that “prospecting” is usually with higher levels of organizational performance, and according to the data, prospecting trumps defending and reacting. It is important to note that the findings made by this article are not supported in all contexts. However, the article concludes that prospecting is “the stance best able to overcome performance obstacles associated with regulation and red tape.”
Strategy and Performance: What do we need to know?
Despite the evidence presented by the article, the authors explain that strategic management needs “more theory, more data and more empirical evidence from a variety of locations.” The authors propose that studies done in the future not only conceive of strategy as a continuous variable, “but also place public agencies along Bozeman’s publicness continua.” The authors believe that this additional dimension to research in this field will yield new empirical and theoretical contingencies.
In their conclusion, the authors state that their review of the evidence shows that “some small steps have been taken on a long journey,” but that more steps need to be taken and must be done by explicitly theorizing the relationship between strategy and publicness, and by being cognizant of national context.
The authors proffer that the current data, on local governments in England, Wales, and Texas is insufficient for proper conclusions on the theory and practice of strategic management in the public sector. The authors call for academics and practitioners to acquire a stronger knowledge on which strategies work best in a much wider variety of circumstances by the year 2020.
The Evolution of Public Sector Strategy
Brown, T.L. (2010). “The Evolution of Public Sector Strategy.” Public Administration Review, December-Special Issue, S212-S214.
Author: Rosa, Adelaide Lee; Editor: Berkley, Njeri N
The Evolution of Public Sector Strategy
The initial research finding that underpins this work, which should be referenced and consulted for further insight, “concluded that true strategic behavior … was possible in the public sector, but extremely rare” (Nutt and Backoff 1995). Strategic behavior is limited by complex policies and programs, political concerns, and institutional limits on discretion. However, it has recently been boosted by the ever growing access to information that public managers enjoy. What remains to be developed are the cognitive frameworks for information management in the 21st century. Strategic theory needs to evolve from zero-sum resource competition to alternative explanations.
Part I – The Building Blocks of Public Sector Strategy
“ Managers should have access to information about factors that influence organizational goals and objectives.  Plans of action based on this information should be the product of organizational participants from multiple levels.  This decentralized fluidity should be coupled with increased managerial autonomy” (Brown 2). Malleable and adaptable plans of action should enable decisionmakers to reevaluate strategies and enforce midcourse corrections as predicaments change and new information becomes accessible. New Public Management is cited as an example of this reinvention in action; linkage to incentive systems has been a key innovation in this process.
Part II – The Missing Building Block – Theory
“Strategy is, at its heart, an exercise in developing and applying theory” (Brown 2). Due to the complexity of public institutions, strategic plans (which Brown calls decision-making heuristics) are helpful to simplify the process and focus on the most critical elements. It is important to note that any theory, like any strategy, is based on a set of assumptions that must be understood before putting either into practice. All too often practitioners accept the theory without investigating the assumptions beforehand. Theory can link into practice through the use of logic models that “identify the assumptions, resource inputs, programmatic activities, outputs, and outcomes” (Brown 2). However useful strategy planning tools such as these are, they assist merely in evaluating strategy, not in creating it from theoretical principles.
Strategy theory, even in the 21st century, remains rooted in realist thought and military treatises. These antecedents influence a worldview of competition, of limited resources, of victory and defeat. Theories such as these have continued relevance when there is indeed resource competition, such as in the budgetary process, but are increasingly antiquated for most public institutions. Instead, we as practitioners must turn to social science theory: economics, political science, sociology, psychology. Relying on social scientific theories allows the public manager to think strategically in both competitive and non-competitive dynamics.
Example: public sector contracting. Why are “inter-organizational collaborations” advantageous? Economic theories like transaction-cost economics and principle-agent theory investigate opportunism. Sociological institutionalism investigates reciprocal norms of behavior (Brown 3). Multiple disciplines and theories must be combined to craft a better understanding and a more robust strategy. Social science frameworks must be translated and applied to strategic decision making in the public sector.